The claimant in Olsen v Gearbulk Services Ltd worked as a strategy and business development director for a worldwide shipping business.  He was dismissed (he said as a result of making a whistleblowing disclosure) in England.  The Tribunal held that his employment was not sufficiently closely connected with the UK to make a claim.

The claimant had a number of connections with the UK:

  • Over the three years he was employed, he spent just under half his working time in the Weybridge office of a UK group company.  However, this amounted to less than 90 days each year, so that he did not become subject to UK tax on his earnings.
  • It was originally envisaged that he would move to the UK and he had been offered employment by the UK company.  However, he decided (for both financial and family reasons) not to accept this, signing a contract with a group company incorporated in Bermuda instead. 
  • About 15 to 20 of the 100 employees he managed internationally were based in the UK.
  • He was paid in sterling, at his choice, because that was the most financially advantageous arrangement for him. 

On the other hand, there were a number of factors which diminished the UK connection:

  • The claimant was a Danish national, domiciled in Switzerland and/or Denmark and with his home in Switzerland.
  • His employer was genuinely incorporated in Bermuda (it was not simply a "flag of convenience") and his contract of employment was governed by Bermudian law.
  • The claimant's salary and expenses were processed in Bermuda.
  • The contract specified his base as being in Switzerland and it was so in reality.
  • The accommodation rented in Surrey was taken in the name of a family company, as part of his overall strategy to maximise his financial benefits.

The EAT, after considering all these factors, upheld the Tribunal decision that his employment was not sufficiently closely connected with the UK and UK law for him to be able to claim unfair dismissal here.

The claimant was based in Switzerland in order to perform an international job.  That took him more to the UK than to any other single jurisdiction but more to jurisdictions other than the UK than to the UK.  Given his autonomy and seniority, it was entirely a matter for him where he chose to perform his international tasks and he clearly found it more convenient to do so to a substantial degree in the UK, although never so much as to make himself a resident for tax purposes.  He had taken great steps to distance himself from having any permanent base in the UK. 

It was clear that the employee's seniority and autonomy played a key role in the EAT's decision.  They noted that it was not a disparity of bargaining power between the claimant and his employers which had induced him to enter into the Bermudian contract, rather than the "UK" contract he had been first offered; it was the fact that he wanted, above all, to structure his affairs so that he avoided UK tax.

The EAT commented that the Tribunal was not only entitled to take into account the structuring of his working arrangements for tax purposes, but it was bound to do so, particularly in an area of law which involves the protection of employees. 

In another case on territorial scope earlier this year, Lodge v Dignity & Choice in Dying, the EAT found that a senior employee who transferred to Australia at her own request and subsequently worked remotely for her London employer could bring unfair dismissal and whistleblowing claims in Great Britain. She also structured her affairs (becoming an Australian resident) for tax reasons, but the key feature in that case was that all her work was exclusively for the benefit of her British employer's London operation.